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The gasoline prices that U.S. consumers are expected to face in 2027 are now expected to be higher than previously reported, although they are still expected to see some relief from the pump prices that have prevailed through much of 2026.
The latest short-term energy outlook produced by the Energy Information Administration (EIA), the Department of Energy’s independent statistical agency, says it expects gas and diesel supplies to remain constrained through the end of 2027.
The EIA estimated in its November report that retail gasoline prices are expected to be $3.73 per gallon in 2027, which would be a decline from this year’s $3.89 per gallon.
However, the EIA estimate for 2027 represents a 5% increase from the agency’s outlook last month, which predicted gas prices would rise to $3.56 per gallon nationally in 2027.
GAS PRICES FALL BELOW $4 A GALLON FOR THE FIRST TIME SINCE JULY
Gas prices are expected to fall slightly in 2027 compared to 2026, although the EIA’s latest forecast shows higher prices than in its October outlook. (Brandon Bell/Getty Images)
“Although we expect the average retail price of gasoline and diesel in the United States to decline in 2027, we have increased our forecast for these prices compared to last month’s outlook,” the EIA explained.
The agency’s latest forecast for diesel calls for retail prices at $5.03 per gallon in 2027, which was up from the previous forecast of $4.49 per gallon, but would still be lower than the $5.25 per gallon for diesel that consumers faced in 2026.
“We now assume that global oil markets will face persistent supply constraints through the end of 2027. These market conditions will support wider oil crack spreads next year and incentivize increased U.S. refining operations,” the EIA explained.
CONSUMER INFLATION INCREASES FASTER THAN EXPECTED IN OCTOBER, CPI REPORT SHOWS
Data from AAA showed that the national average price of gasoline in the United States fell below $4 per gallon this week for the first time since July. (Justin Sullivan/Getty Images)
The forecast notes that in the global energy market, crude oil prices rose for the third consecutive month in October due to falling inventories, attacks on oil tankers in the Persian Gulf, limited shipping capacity and rising transportation costs that tightened supply.
The EIA said its forecast predicts that “most Middle East production, outside of Iran, will return to pre-conflict averages by the middle of next year.”
While Brent crude oil spot prices are expected to remain near $100 per barrel for the remainder of 2026, the EIA forecasts the price to gradually fall to an average of $77 per barrel in the fourth quarter of 2027.
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Tankers have faced Iranian attacks in the Strait of Hormuz, slowing the flow of oil from the Middle East in 2026. (Reuters)
Consumer gas prices fell below $4 per gallon on Tuesday for the first time since July, and AAA data showed the national average price fell to $3.97 per gallon.
Gas prices fell further Wednesday, with the latest figure showing the national average at $3.94 per gallon, down about 18 cents from a week ago and 41 cents from a month ago.
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